Settlement Agreements and School Costs

Drafting settlement agreements require careful language considerations to ensure that the intent of the parties can be determined based upon a plain reading of the agreement. In a recent unpublished Appellate Division decision, we briefed the issue of whether the plain meaning of the terms of a settlement agreement should be strictly construed. In Fanelli v. Hnatowski, 2018 N.J. Super. Unpub. LEXIS 1947, the Appellate Division determined that “school costs” as defined in the parties’ Settlement Agreement, should be construed narrowly within the plain meaning of the Agreement to encapsulate payment of school tuition.

By way of background, the parties’ Agreement contained a provision which provided:

Both parties agree that they will equally (50/50) divide the cost of any work-related childcare, or school cost after consultation with the other.

The trial court, in interpreting this provision, entered an Order which directed Defendant-Husband to equally share in the children’s private school tuition. Defendant appealed this Order, based upon his argument that the term “school costs” as set forth in the parties’ Agreement could not and did not include the cost of private school tuition, and that Plaintiff-Mother neither obtained his consent or consulted with him before enrolling the children in private school.

The Appellate Division affirmed the trial court’s Order. In so doing, the Appellate Division determined that it would not “rewrite or revise an agreement when the intent of the parties is clear.” Quinn v. Quinn, 225 N.J. 34, 45 (2016). The Court concluded:

The term is unambiguous and there is no indication in the PSA the parties intended the word “cost” to be limited to only certain, unexpressed expenses that do not include tuition. Because the language is clear and unequivocal, the court must enforce the agreement as written.

With respect to the ancillary argument whether or not Defendant-Father was consulted with prior to enrollment in private school, the Appellate Division determined that such argument was “irrelevant” as Plaintiff-Mother sought contribution prospectively and Defendant-Father never sought an Order compelling the children to attend public school.

The lesson to be learned here is that settlement agreements must be carefully drafted to ensure that the intent of the parties in agreeing to terms to be contained therein is expressly set forth. If Defendant-Husband had intended for “school cost[s]” to exclude tuition, he should have insisted that the agreement be drafted to reflect same, although I can’t imagine that Plaintiff-Mother would have agreed to such exclusion. That is an argument for another day.

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